Monday, March 21, 2011

Gary Younge of The Guardian was asking on Twitter today why there is no reaction in Spain against a youth unemployment figure of 43%? The responses he got varied from some typical "mañana" stereotyping to people suggesting that there are particular cultural factors which cushion to some extent the lack of employment opportunities for young people. The support of the family for example. Perhaps the submerged economy also has an influence. The problem I have with what could be called the Southern European cultural explanation is that just 10 days ago there was a huge demonstration in Lisbon by Portuguese youth. Now Portugal is not so dissimilar from Spain in terms of its culture, although it is a significantly less equal society.

I was thinking on similar lines to Younge when I was down in Madrid's Puerta del Sol yesterday watching the arrival of a demonstration called by Izquierda Unida against the government's cutbacks and in favour of a different economic policy. The demonstration was not a failure, there was a healthy enough turnout, but it was a long way from what happened in Lisbon. Despite claims to the contrary by the organisers it came nowhere near to filling the Puerta del Sol as I found myself with plenty of space from the position where I took the photograph of the speakers on the stage. That's a bit depressing, with everything that's happening you would have thought there would be more reaction.

Izquierda Unida doesn't seem to be attracting those voters who are disenchanted with Zapatero's administration, at least on the evidence of the polls. The trade unions, following their pact with Zapatero over the pension cutbacks, have effectively abandoned active protest for the rest of this parliament. There's no shortage of people who will tell you that they would have protested a year, or 6 months ago; but they don't suggest much intention of doing it in the future. I don't know what the answer to the question is, although I suspect that a significant part of Spanish society is simply not ready for the idea that the good times won't automatically return. The Portuguese, who never really had it as good as the Spanish anyway, perhaps have a more realistic appreciation of the kind of society and lack of opportunities that they have to contend with?

Friday, March 18, 2011

The nuclear catastrophe following the tsunami in Japan has dealt a severe blow to the hopes of those who have been promoting nuclear power as a significant part of Spain's future energy requirements. In the short term the battle to keep open the ageing Garoña plant in Burgos well beyond its projected life span has received a sharp setback with the revelation that the terribly damaged Fukushima reactors in Japan are very similar to the model used for Garoña. The nuclear lobby has been relying on the possible return to power of a sympathetic Partido Popular to inaugurate a new golden age for the technology in Spain. Despite strong media attacks on critics of nuclear energy from their allied journalists, the PP has suddenly gone very quiet on the issue.

The nuclear industry always relies on a double standard as far as safety is concerned. If a nuclear plant survives some sort of potential hazard then that's proof of how safe the industry is. On the other hand, if things get dangerous then anyone who raises questions about the safety of the technology is accused of taking advantage of the situation. It's also an industry with a long history of being extremely economical with the truth. This applies very much to safety issues, where secrecy tends to be the rule over accidents in nuclear plants. Those of us from the UK just need to think of Windscale/Sellafield. But the problems with the truth also apply to the economics of nuclear power.

Comparisons of generating costs between nuclear and other forms of energy often seem to show a startling advantage for the nuclear option. The question is just how much of the real cost is reflected in those favourable figures. A huge proportion of the economic burden for nuclear energy has been borne by the state, both in terms of research into the technology and also in supporting the huge costs of setting up nuclear power stations. Indeed, there is no legal barrier to the construction of new nuclear power stations in Spain, but the industry waits instead for huge injections of public money. Then there are the considerable security costs associated with this kind of energy, not to mention the storage of all that radioactive waste. 50 years or more of nuclear power and the question of how to deal with its dreadfully dangerous waste products is still not resolved.

No other form of energy production has the capacity to create such danger, even without the risks of unpredictable natural events such as earthquakes and tsunamis. Nevertheless, the economic interests behind it will just wait a while before attempting to resume with the soothing message of cheap, clean, energy. When Chernobyl went wrong it was because those goddamn Commies just built cheap junk. Now with Japan it's hard to accuse them of being technically incompetent, so the talk is all of the terrible force of the tsunami when the real problem could be anything capable of disabling the cooling mechanisms on the reactors. It can't happen here until it does.

Wednesday, March 16, 2011

Yet another of these ranked listings of world universities has put those from Spain way down the list. This latest ranking, from the Times Higher Education website, has the University of Barcelona as the first Spanish educational institution to appear - in 142nd position. Ahead of Spain, apart from the UK, France and Germany are other Western European countries such as Switzerland, The Netherlands, Sweden, Ireland, Belgium, Finland, and Austria. Still, it could be worse. The Shanghai world university ratings put the first Spanish university (Madrid's Universidad Autonoma) in a dismal 201st on the list. In this ranking Spain doesn't lead the Spanish speaking world, both Mexico and Argentina have higher ranked institutions.

So does it matter? The immediate instinctive response is to say of course it should, a developed European country with 46 million inhabitants could reasonably expect to have at least one well regarded university. I ask the question of whether it matters partly because it doesn't seem to matter much to the Spanish. There are some who bemoan the lack of research investment, or the general lack of facilities in higher education in Spain, but not many. Education hardly seems to feature in the national political debate, and I'm not just talking about university education. A country where 30% of pupils have been abandoning education at the first possible opportunity should have something to worry about, but how much do you hear about this? It's far easier, especially if you live where I do, to find someone who thinks that the only educational problem the country has is to do with the language of instruction used in Cataluña.

I took a look at some of the responses to the Times rankings in both Público and Meneame. It's a bit depressing to read the comments. The worst case response is that which opts for the hyper-sensitive and defensive line that it's all part of the Great Anglo-Saxon Conspiracy. According to this theory of the world, any ranking of any kind which fails to put Spain in a high position is using a secret weighting factor devised by those evil anglo-saxons to specifically exclude the Spanish from the higher positions. Other commenters seem to think it just doesn't matter because Spain continues to produce substantial quantities of well educated graduates and doesn't go in for the elitist selection policies applied in other countries.

I have some sympathy with the last argument, but only some. The problem is that it converts the idea of higher education into that of universities being a variety of graduate factory. The missing factor with this argument, apart from the production line vision of what a university is for, is that universities are not just supposed to be about teaching. I've only ever been to Cambridge University as a tourist and there is much I dislike about the elitism of the UK's top universities. But I have to see the other side of the coin, I've been making a decent living for much of the last 20 years out of a software application which is a fairly direct descendant of work that was done at Cambridge. It's in innovation where Spain's universities really seem to be absent.

Everything has to be put into context, having Silicon Valley doesn't make a single significant difference to the daily lives of many people in the US, and the UK's possession of some very highly rated universities doesn't mean that it has any sort of stable economic model to offer a future for its graduates. But having a policy that encourages and promotes academic innovation has to have some sort of knock on effect for the rest of society. Spain doesn't have an economic model that values education despite the often extraordinary importance which is attached to academic qualifications as opposed to professional experience. That is a fundamental problem for times when economies that can't create employment for the future are going to end up adding more and more unwilling additions to the ranks of the insecure and badly paid.

Saturday, March 12, 2011

No, this is not a spoof post. Despite the reputation that Benidorm has for other kinds of holidays, it does make an excellent base for doing some walking in the surrounding region. Which is not to say that you can't also stay in a small, quiet village in the hills if that's what you prefer, but both of the routes described here are very easily accessed from the resort.

Objective number one was the peak of Puig Campana, close to the coast but still reaching over 1400 metres at the top. Easily visible from Benidorm itself, where you can clearly see the distinctive cleft in one of the two summits, the route began by taking a bus from the stop near the Hotel Bali to the village of Finestrat. In the village itself you walk up towards the mountain until you reach the fountain called Font del Molí. From this point the path to the summit begins.

The first part of the climb is relatively easy, and helps to stretch your muscles a bit for what comes later. I had done Puig Campana before, several years ago, and remember it being a very tough climb. The most direct route to the top follows the gully between the two summits, but this is full of loose rocks and stones. The trick is to try and find the path, such as it is, that runs up the side of the gully.

Always staying within a range of 40 metres or so from the stones, there are various narrow paths to the right going up which help you to avoid walking on the rocks. It's a steep climb, but then that gives you a good excuse to rest occasionally and enjoy the views.

Faced with the last, narrower part of the gully we decided to do a bit of a shortcut which after a little bit of scrambling worked quite well and connected us with the much gentler path that takes you the rest of the way to the summit. The views from the top of Puig Campana are spectacular. You see the towers of Benidorm very clearly, as well as the line of the coast all the way up to Calpe.

To come down the mountain we opted for descending on the other side, facing inland. We met plenty of people coming up that way and it's also a steep path; although a bit more recognisable than than the gully route we took to ascend. On the other side of Puig Campana it's no longer so evident that you are in a major tourist area. The walk back to Finestrat is considerably longer as you have to do a circuit around the base of the mountain, but it's mostly easy walking as well as being quiet and beautiful.

For day two of the Benidorm weekend we didn't even need to get a bus out of the town. The Serra Gelada is the range of hills (and cliffs) that runs along the coast between Benidorm and Alfás del Pi. To start the route from Benidorm's Rincon de Loix you just need to find the road that takes you up to the cross overlooking the beaches and the town below. Here the road ends and you take a footpath through what is still thankfully a protected area. The weather and visibility were perfect for walking on the day we did this route (in May), this is Puig Campana seen from the Serra Gelada.

Behind us was Benidorm.

This was the way ahead. The route itself is not difficult, but it is not flat either. Several times you have to descend only to climb back up on the other side of the dip. The path always sticks fairly close to the coast, a bit too close in some places if you are a vertigo sufferer. I prefer to look down at the sea from a safe angle rather than go right up to the edge of the cliff and look down.

For a while you have to look inland for signs of development, but eventually the coast of Alfás, Altea and Calpe comes into view. As you get nearer to the end of the track it starts to descend quite sharply. We went down to the beach to have a drink and a rest, but then we returned back to Benidorm via the same route. This makes for quite a long walk, but not a particularly exhausting one; the alternative is just to get a bus back from Alfás del Pi or the train from nearby Altea. As long as the days are not too short the return walk can be taken at a very gentle pace. So who said Benidorm is just a place for beach holidays?

Thursday, March 10, 2011

The story this week that a convent in Zaragoza had been the victim of the theft of €1.5 million has provoked a certain amount of hilarity but also some intense speculation about how the sisters could have accumulated such a large amount of money. According to reports, the police are as interested in the origin of the money as they are in who might have stolen it. The latter issue is of course very difficult, the suspicion is that it has been an inside job and with so many people wearing almost identical clothing there doesn't seem much point in organising an identity parade.

The stolen money was said to have been stored in a cupboard, and allegedly consisted of a significant number of those elusive €500 notes which we hear so much about. The convent has given a somewhat confusing version about the origins of so much money, we're no longer sure whether it came from "savings", or the income from a talented artist in the community. However, after a couple of days the convent has now reassessed the amount of money stolen to bring it below the €500,000 mark.

The emergence of such a widely publicised story involving money of questionable origin almost coincided with a report from the national foundation of Spain's remaining savings banks about the size of the submerged economy in Spain. Their report put it at a possibly conservative 17% of economic activity in the country, especially taking into account the influence of the crisis on these things. Even so, it is a figure still way above the average in Western Europe, and the same report estimates that around 4 million people are involved in some way in undeclared economic activities.

Despite the collapse of the construction bubble, Spain still continues to be the home of an unhealthy percentage of high denomination Euro banknotes. There have been frequent calls made for something to be done to force this money out into the open. Spain's budget problems are much more a consequence of uncollected revenue than of some imagined reckless overspending by the government. Ideas on what to do range from proposing the abolition of the €500 note to a change in its colour; although something similar would probably need to be done with the €200 version as increased pressure on operations involving €500 notes has led to something of a shift. Perhaps a search of religious institutions might also help?

Monday, March 07, 2011

According to some recent reports, the Partido Popular is hunting for someone who would make a credible job of implementing something which currently doesn't exist. The PP's economic policy, the miracle cure for the crisis. Although we don't know any of the content we do know, from what party leader Mariano Rajoy has said in the media, that the secret recipe will work in just two years. The problem is that, following the sad fiasco of the appointment of Manuel Pizarro at the last general election, the PP lacks any heavyweight politician who can deal with economic matters.

The model of course is Rodrigo Rato, currently very busy with Caja Madrid or Bankia or whatever it's called this week. Rato is regarded by many inside the PP as the man responsible for Spain's economic miracle, having been economy minister between 1996 and 2004. His reward for these years of hard work (and the Spanish collaboration in the Iraqi invasion) was to become the boss of the IMF, although he didn't manage to serve a full term in that job. Indeed, a recent report on the complete failure of the IMF to anticipate the crisis has not done a great deal for the credibility of Rato.

Of course we have to recognise that Rodrigo was just the political appointee running the shop, it would be unfair to expect him to answer for the failures of the organisation which in any case he abandoned before things got really grim. But it does help to put Spain's economic problems into a bit of context. It's easy to forget, especially if you assume the PP's arguments, that there ever was an international context to the crisis. The convenient thesis for all of those unwilling to deal with the implications of the financial crisis has been to pretend that dozens of economies went simultaneously into recession because of the incompetence of their governments. Reality is turned on its head to sustain this fiction, so the budget deficit becomes a cause of the crisis rather than a consequence.

In the Spanish case it's really worth going back to the boom years before the crisis to put things into perspective. Because the economic model that Zapatero's administration pursued until the crisis brought the good times to an end was exactly the same as that implemented by Rodrigo Rato under Aznar's administration. Not so, PP supporters will protest, Zapatero has ruined the golden economic legacy left to him by the PP. So here's a party game that you can play with anyone who sustains that argument. Ask them if they can name the person who spoke for the PP on economic matters between 2004 and 2008. I know, it's not much of a party game. Frankly it's for those very quiet nights. But there is a good reason why many PP supporters won't be able to answer the question. There was no economic debate in Spain before the crisis hit.

You could put forward a good argument for saying that Zapatero should have changed the PP's economic model, so that the profits created by the bubble could have left something for the future. But he didn't, and the PP certainly never asked him to. This is important because the few clear signals we get on the PP's economic policy suggest that they are simply aiming to repeat the Rato bubble again; except that now they have to try it in circumstances that are much less favourable. Add to this their admiration for the Cameron model of turning stuttering growth back into imminent recession and you might think that the 2 year estimate is starting to look a little optimistic. There doesn't seem to be a rush of volunteers yet to fill that economics vacancy.

Saturday, March 05, 2011

With the rush to condemn Colonel Gaddafi's attempts to crush his opponents in Libya, it is almost possible to forget just how many friends he managed to make around the world in recent years. Spain is no exception to this. Do a Google search for images of the colonel with Aznar or Zapatero and there is no shortage of results. In Aznar's case, the friendship stretched to permitting the great leader's son-in-law, Alejandro Agag, to open a partridge hunting estate in Libya. The relationship was apparently sealed with Agag inviting one of Gaddafi's sons for a happy hunting trip in Spain.

In return the Libyan regime also became a landowner in Spain, owning a substantial 6.500 hectare finca in Málaga. It seems that there were plans to construct houses and the obligatory golf course on part of this estate, but that the proposal ran into planning difficulties. This seems to be an extraordinarily anomalous situation given that everyone else in the country has normally gone ahead and built their houses without even worrying about the minor details of licenses. A further connection with Spain is that one of the Libyan leader's numerous sons has been studying in Madrid, a post-graduate MBA at the IE Business School. It appears that following the scandal this week involving the London School of Economics, Khamis Muammar has been hastily expelled from the school. I'm not sure on what grounds, after all the significant web of connections that Gaddafi's regime possesses suggest few problems of incompatibility between business and the art of repression.

With the available stock of Arab dictatorships declining rapidly, we are now getting a flurry of visits from Western leaders to the region. Hot on the heels of David Cameron's recent arms sales trip, Spanish prime minister Zapatero was in Qatar last week. It seems to have been a successful visit, with the local regime showing interest in investing some oil money in the foundations for Spain's next banking crisis as the local savings banks are transformed into real banks with even greater potential for creating havoc with our money. What's the betting that Qatar's rulers will be ahead of us in the queue for recovering money should things go badly wrong again?

There was another, unfortunately timed, international trip by Spanish politicians recently. As Mubarak's regime in Egypt was collapsing, a high level cross-party parliamentary group led by José Bono was visiting the former Spanish colony of Equatorial Guinea. Human rights featured nowhere on the agenda for the meetings with one of Africa's nastiest dictatorships, the visit was yet another attempt to get the regime to allow the former colonial power a cut of the country's significant oil wealth. Really the visitors should have worn Repsol advertising on their clothes. Obviously several other countries have no qualms about dealing with the regime led by Teodoro Obiang, so Bono was at pains to avoid any annoying references to the lack of democratic institutions by claiming that the two countries had many more things uniting them than dividing them. I hope the drivers protesting about the new restrictions on motorway speed limits in Spain appreciate the efforts that are being made on their behalf.